Newly Enacted Civil Code Section 1946.1 Extends the Notice Period For Termination of a Residential Tenancy to 60 Days

On September 30, 2006, Governor Schwarzenegger signed Assembly Bill 1169, which has since been codified as Civil Code section 1946.1. This statute, a companion to Civil Code section 1946, went into effect on January 1, 2007, and requires landlords to provide a tenant with 60 days notice prior to a proposed date of termination. This newly enacted statute doubles the previous required notice period of 30 days.

Owners and managers of commercial property need not be concerned as this statute applies only to residential dwellings. (Section 1946.1(b).) If you own or manage a commercial property, you are still subject to the 30 day notice rule set forth in Section 1946. However, if you are the owner or manager of a residential property, you are now subject to the 60 day notice requirement and should take steps to ensure compliance with this statute.

How Does this Law Affect Owners or Managers of Residential Real Estate?

Civil Code section 1946.1 requires owners and managers of residential property to provide tenants with 60 days notice to terminate a tenancy. The tenant, on the other hand, needs only to give notice of his/her intention to terminate "for a period at least as long as the term of the periodic tenancy prior to the proposed date of termination." (Section 1946.1(b).) Thus, this statute permits a tenant in a month-to-month tenancy to provide 30 days notice of his/her intent to terminate while requiring the owner to provide 60 days notice to terminate. It should be noted that this statute does not affect the rules governing an owner/manager's ability to terminate a tenancy for cause, such as the failure to pay rent.

In addition, the 60 day notice requirement established by Civil Code section 1946.1 is not absolute. The statute carves out two exceptions where only 30 days notice is required. First, section (c) provides that if the tenant has resided in the dwelling for less than one year, the landlord needs only to provide 30 days notice prior to the termination date. Second, under section (d) the landlord is required only to give 30 days notice if all of the following apply: (1) the unit is alienable separate from the title to any other unit; (2) the owner has contracted to sell the dwelling or unit to a bona fide purchaser and has established an escrow with a licensed agent; (3) the purchaser is an individual; (4) the notice is given no more than 120 days after the escrow has been established; (5) notice was not previously given to the tenant under this section; and (6) the purchaser in good faith intends to reside in the property for at least one full year after the termination of the tenancy.

In signing the bill to enact Civil Code section 1946.1, Governor Schwarzenegger commented that it ensures the protection of groups in need of special accommodations, such as the elderly and disabled, by providing them sufficient time to find new housing. The Governor believes this statute "strikes a reasonable balance between the needs of tenants and those of property owners."

"Sunset" Provision in 2010

If you are a residential property owner or manager, the good news is this statute was enacted with a "sunset" provision; it will remain in effect only until January 1, 2010. (Civil Code section 1946.1(h).) At that time, the statute will be repealed unless legislation is enacted to delete or extend that date. However, in the meantime, if you are the owner or manager of a residential property, make sure you are providing the 60 days notice required by this statute if you intend to evict a month-to-month tenant.

If you have any questions regarding any real estate legal matter, in San Diego please contact Brian Frasch (litigation) at bfrasch@gordonrees.com or Eric Young (transactions) at eyoung@gordonrees.com or call us at (619) 696-6700. In San Francisco, please contact Phil Wang at pwang@gordonrees.com or call us at (415) 986-5900. This Real Estate Update was prepared by Peter Olson of the firm's San Diego Office. He can be reached at polson@gordonrees.com or (619) 230-7759.